Samsung Electronics Q1 profit tops market expectations on solid chip demand

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Samsung Electronics Q1 profit tops market expectations on solid chip demand

Samsung Electronics Co Ltd reported on Thursday an estimated 50per cent jump in quarterly operating earnings to post its highest first-quarter profit since 2018, beating expectations as solid demand underpinned prices for memory chips.

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Earnings at the world's largest memory chip and smartphone maker were also supported by brisk smartphone sales in the quarter, along with a disruption at a rival NAND Flash chip plant, analysts said.

Samsung put its first-quarter profit at 14.1 trillion won ($11.6 billion) in a preliminary earnings release, versus a Refinitiv SmartEstimate of 13.3 trillion won. Revenue likely rose 18per cent from the same period a year earlier to a record 77 trillion won, also above market expectations.

"The guidance beat market expectations, probably due to memory chip shipments and prices being better than expected," said Park Sung-soon, analyst at Cape Investment & Securities.

Although memory chip prices dipped in the first quarter, analysts said solid demand from data centre clients as well as cautious investment spending by chipmakers and limited capacity expansion buoyed Samsung's chip earnings, which make up about half of its total profits.

The chipmaker also likely benefited from a disruption at a rival NAND Flash chip plant owned by Japan's Kioxia and American firm Western Digital due to contamination of raw materials.